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By Lucas Scholhamer

Jeremy Grantham has a long history of investing success. The founder and chief strategist of GMO, a Boston-based investment management firm overseeing more than $100 billion in client assets, has made a name for himself as a bearish guru capable of predicting bubbles with uncanny accuracy and profiting from value stocks in a wide variety of sectors. Investment Underground took a look at some of the brilliant strategist's recent buy ideas:

Avery Dennison Corporation (NYSE:AVY): This California-based Fortune 500 company has been producing pressure-sensitive adhesives since 1935. Stock traded up to $42.36 at the time of writing, appreciating about 37% since May last year. Shares have a P/E ratio of 14.8, well above the industry average, and AVY boasts a dividend yield of roughly 2.4%. The company also announced an 18% decrease in net income for Q1 due to rising material costs, although revenues grew to $1.66 billion, up from $1.55 in the first quarter of 2010.

This stock is an attractive buy for those with long-term aspirations. AVY was able to compensate for a decline in office supply sales (accounting for 14% of total sales) with a 10% increase of sales in the pressure-sensitive material division (responsible for approximately 56% of total sales). These pressure-sensitive labels can be found on anything from beer bottles to street signs, so the profitability of this major segment of the company is not dependent upon the success of any single industry. Furthermore, AVY has been developing Radio Frequency Identification technology, creating thin, chip-like inlays that effectively act like license plates for individual products. These cutting-edge labels are similar to barcodes, but RFID technology does not require a scanner and it offers the distinct advantage of being able to distinguish between each separate item, which could be huge for retailers and just about anyone who needs to keep an accurate record of inventory. AVY's diverse customer base in their pressure-sensitive materials division ensures stability, while their focus on becoming a leader in emerging technology provides potential for additional growth. Also, some analysts are optimistic that shares will break their $43.00 resistance level in the near future.

Although AVY's diverse customer base should maintain a consistent demand, the company is ultimately subject to the price of raw materials, which is what hurt them in Q1. However, AVY has a long history of success and growth, and Jeremy Grantham's confidence in the company only adds to the attractiveness of the stock.

World Acceptance Corporation (NASDAQ:WRLD): This 49-year-old company makes small, short-term loans to customers with little access to consumer credit in the U.S. and Mexico. Shares hit their 52-week high Tuesday at $68.90 before settling down 0.12% at $67.58 to close today. Their trailing P/E of 12.8 is slightly below the industry average, and a forward P/E of 9.2 is attractive. WRLD recently announced a record 10.5% increase in revenues up to $136.9 million for Q4 of the fiscal year ending March 31, 2011 (compared to Q4 2010). Diluted earnings per share also rose 19.9% to $2.11 in the same time period. WRLD shares have nearly doubled their value in the last year and have more than tripled in the last 2 years, recovering as quickly post-recession as it once grew pre-recession.

We recommend buying this stock. With WRLD hitting a YTD high just this week, we'll wait and see if it can break through the recent resistance around $67.00 as easily as it has surpassed other levels. Additionally, the increasing utilization of 73 new offices WRLD opened in FY 2011 should help pay off the startup costs of these new branches and also begin to offset the 11.2% increase in general and administrative costs of operation during Q4 2011. CEO Sandy McLean emphasized in the company's April 28 conference call that an increased EPS was due largely in part to the $53.3 million WRLD spent on a share buyback program, so it doesn't hurt that the company is still authorized to spend around $25 million more for the same purpose. With Q4 gross loan balances increasing 13.6% to $875 million, it is clear that demand for the small- and medium-sized loans WRLD offers has remained strong as the economy recovers, and the demand may increase even more as new offices become profitable and further expand the already-large client base.

On the other hand, some may argue that WRLD's post-recession growth explosion may have been fueled by a recently impoverished consumer base. As the economy continues to recover and disposable incomes increase, the demand for small loans could diminish. According to this macro view, WRLD growth could potentially level off or even decline, and investing soon after reaching the recent YTD high may prove to be only marginally profitable at best.

Spectrum Brands Holdings, Inc. (NYSE:SPB): SPB is a consumer products company specializing in commercially available batteries and appliances, pesticides/insect repellents, and pet goods. Some of their brands include Rayovac batteries, Black & Decker home appliances, and George Foreman grills. SPB shares dropped 1.14% to $34.55 at the time of writing. Despite the drop, SPB has still managed to recover nicely from a late-March dip that saw shares fall as low as $26.03. The 52-week range is $22.86 to $36.61. SPB has a trailing P/E ratio of 17.5, and the forward P/E is a mere 11.5. In their latest quarterly report for the quarter ending May 3, 2011, SPB announced a 30% increase in sales (from $533 million to $694 million) as compared to the same quarter in 2010. The company predicts a net sales growth of 3-4% for FY 2011.

We recommend holding SPB stock. Global sales of batteries were hurt partially by unfavorable currency translations (to which SPB attributed $8 million of the loss, in their Q2 report), and a large portion of the domestic sales that ultimately compensated for this loss came from a large deal with a single customer. Negative macroeconomic conditions combined with potentially unpredictable domestic deals provide reason for pessimism. However, the company's relationships with powerhouse retailers capable of carrying SPB's entire array of seemingly random products means that SPB goods will continue to reach a large base of American customers. Additionally, the negative factors associated with international sales that hurt the battery division may have little or no effect on SPB's more domestically-targeted brands. Jeremy Grantham's investing style suggests that he believes SPB could be a winner in the long run, but with the wide fluctuation of the stock price over the last several months, it would not be farfetched to predict an opportunity to pick shares up at a lower price in the near future.

Unisys Corporation (NYSE:UIS): This Pennsylvania-based company offers information technology and outsourcing solutions for sectors ranging from financial serves to transportation. Shares traded at $29.17 upon closing, up 1.71% on the day. Even with today's slight increase, share values are still struggling to recover from a significant fall off their YTD high of $41.02 in late February. UIS stock has a trailing P/E of 9.3 and a forward P/E of 7.5. The company's Q1 performance report indicated a first-quarter net loss of $39.4 million, with a loss of 95 cents per diluted share, largely in part to the company's $38.1 million charge to help eliminate debt.

So is this company a bust or a valuable investing opportunity? Despite the less-than-impressive aforementioned numbers, there may be hope that UIS is the latter of the options. Unisys CEO Ed Coleman claims that UIS has taken steps to improve their financial base for future success by eliminating $390 million of debt and halving the annual interest expense rate. For the fifth consecutive quarter, year-over-year IT outsourcing revenue increased, up 9% from Q1 last year. Because the service division of UIS (which includes outsourcing solutions) accounts for 85% of the company's total revenue, this trend of year-over-year growth is promising. Furthermore, sales of Unisys' ClearPath server systems also grew, and with the increasing prevalence of cloud computing and smart phones in the business world, demand for digitalization consulting and products will continue to grow. Finally, on Monday UIS announced a partnership with VSoft, a company offering similar services, which will allow them to grow their presence in the financial services industry in Latin America.

However, some may argue that the "debt-reduction" story could merely be an overextended excuse for the company's recent shoddy performance. Questions also arise as to whether a technological consulting company can develop a legitimate server capable of competing with those produced by companies specializing in digital storage.

Pantry Inc. (NASDAQ:PTRY): Pantry Inc. is an independently-operated chain of over 1,600 convenience stores and gas stations located throughout the southeastern United States. Although their primary brand is Kangaroo Express, a majority of the company's stores operate under the brands of BP (NYSE:BP), ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), or Citgo. Shares were valued at $17.97 at the time of writing, up 0.45% on the day and inching their way back from a mid-March dip that saw values drop as low as $13.31. The 52-week range is from $13.10 to $24.44. PTRY stock has a forward P/E ratio of 10.4. In their report of Q2 results released earlier this week, PTRY reported a net loss of $0.3 million ($0.01 per diluted share), a total considerably lower than last year's second quarter loss of $166.1 million. Additionally, the year-over-year Q2 revenue for Pantry Inc. increased to $1.9 billion from $1.7 billion in 2010.

We believe that PTRY stock is a good buy. The company has been able to bolster their 22% increase in fuel gross revenues this quarter (despite a decline in the number of gallons sold) with a 2% increase in store merchandise revenue compared to Q1. This is the fourth straight quarter in which non-cigarette merchandise sales have increased for PTRY, definitely a promising trend. Furthermore, with the American public's relatively constant demand for gas regardless of price, fuel revenue could potentially increase as more drivers hit the road for the summer and continue to fork out money to cover the high gas costs. With price target estimates averaging around $22.00 per share, this could be a valuable opportunity to purchase PTRY stock.

Some critics argue that with the cyclicality of gas prices, a moderate decline in the cost of gas could negate any significant revenue increases that may have potentially resulted from the increased number of drivers on the road. This might also imply that PTRY's recent success is mostly due to seasonal economic conditions, not true, sustainable growth.

Source: 5 Stocks on Grantham's Recent Buy List